Kingston City School District

Transcription

1 DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTABILITY REPORT OF EXAMINATION 2017M-214 Kingston City School District Fixed Assets DECEMBER 2017

2 Contents Report Highlights Fixed Assets How Should Fixed Assets Be Recorded and Accounted For?. 2 Fixed Assets Are Not Properly Tracked. 2 Contractor List Does Not Match IT List 2 What Do We Recommend?. 3 Appendix A: Response From District Officials Appendix B: Audit Methodology and Standards Appendix C: Resources and Services

3 Report Highlights Kingston City School District Audit Objective Determine whether fixed assets are properly recorded and accounted for. Key Findings l Assets were not tagged as District property. l New assets were not added to the inventory list. l The contractor s generated asset list did not correspond to District s Information Technology (IT) department asset list. Key Recommendations l Ensure all fixed assets above the established thresholds have a tag affixed identifying them as District property. l Ensure new assets are added to the inventory software. l Review and compare the contractor s generated asset list with the IT list to ensure the District has a complete and accurate inventory of computers. District officials agreed with our recommendations and indicated that they are in the process of initiating corrective action. Background The Kingston City School District (District) is located in the City of Kingston and encompasses parts of the Towns of Kingston, Esopus, Hurley, Marbletown, New Paltz, Rosendale, Saugerties, Ulster and Woodstock in Ulster County. The Board of Education (Board) is responsible for managing the District s operations. The Superintendent of Schools is the chief executive officer and is responsible, along with other staff, for the District s day-to-day management under the Board s direction. The District contracted with an outside vendor to prepare an inventory listing in May 2016 that identified and tagged all fixed assets valued at $500 or more. During our audit period the District purchased approximately $425,000 in fixed assets. Quick Facts Employees 1,100 Enrollment 6,200 Inventory Value $171 million Budgeted Appropriations $161 million Audit Period July 1, 2016 June 30, 2017 Office of the New York State Comptroller 1

4 Fixed Assets How Should Fixed Assets Be Recorded and Accounted For? Fixed assets, such as machinery and equipment, represent a significant investment of District resources. District officials are responsible for ensuring that fixed assets are protected from loss and inventory records are current and accurate. Officials should ensure procedures are in place for tagging and recording new assets. District officials should also ensure they have a complete and accurate inventory of computers. Fixed Assets Are Not Properly Tracked Business office personnel are responsible for updating and maintaining inventory records for all assets valued at greater than $500. An account clerk distributes asset labels and a form to those departments receiving assets over $500 and each department is responsible for labeling its assets and filing out the form to return to the Business office to add to the inventory software. The IT department maintains its own records to track and monitor IT equipment. Asset tagging We selected 46 computers from two locations to see if the assets had District tags on them. Eleven computers (24 percent) did not have District tags. We were not able to identify when these computers were purchased or their value as they were not recently acquired. Officials told us that the contractor was responsible for tagging these computers. Asset additions New assets purchased during our audit period totaled approximately $425,000, which included 62 computers valued at approximately $54,000. We traced 20 computers valued at $17,500, and found that they were all tagged but none had been added to the asset list created by the contractor. The forms sent to the receiving departments were not returned to the Business office for the assets to be properly added to the inventory record. When assets are not properly tagged or added to inventory records timely, they are more susceptible to loss or theft and District officials do not have assurance that all property can be accounted for. Contractor List Does Not Match IT List We traced 22 1 computers from the contractor s list, valued at $39,000 and could not locate two computers valued at $3,472 in a school building on the IT list. The IT Director thought that the two computers may have been disposed of after the contractor s inventory was completed. 1 See Appendix B for our selection methodology. 2 Office of the New York State Comptroller

5 In addition, we examined the 46 previously mentioned computers to determine if their service tag numbers, 2 and District tag numbers matched both the contractor and the IT lists. Although, all computers had a service tag number only 20 were on the IT list. District officials told us that they think the contractor may have grouped some computers together due to their age. Without accurate and up-to-date fixed asset records, District officials cannot ensure that District assets are properly accounted for and protected against loss. What Do We Recommend? District Officials should: 1. Ensure all fixed assets above the established thresholds have a tag affixed identifying them as District property. 2. Ensure that receiving department personnel complete the new asset forms and return them to the Business office to be added to the inventory software. 3. Review and compare the contractor asset list with the IT list to ensure the District has a complete and accurate inventory of all computers. 2 An identifying tag on the computer placed by the manufacturer when purchased. Office of the New York State Comptroller 3

6 Appendix A: Response From District Officials 4 Office of the New York State Comptroller

7 Office of the New York State Comptroller 5

8 Appendix B: Audit Methodology and Standards We conducted this audit pursuant to Article V, Section 1 of the State Constitution and the State Comptroller s authority as set forth in Article 3 of the New York State General Municipal Law. To achieve the audit objective and obtain valid audit evidence, we performed the following audit procedures: l We interviewed District personnel to obtain an understanding of fixed assets processes and procedures. l We reviewed the fixed asset policy to determine its adequacy. l We compared items tested to both the contractor list and to the District IT list to determine if they were on both lists. l We reviewed the appropriations list and selected the vendor payments that appeared to be fixed assets purchases, then determined the value of new assets purchased. l We judgmentally selected two middle schools due to the high school being under renovation and the elementary schools having BOCES owned computers, within the District for testing random computers. l We randomly selected 22 fixed assets valued at $38,926, from a total of 3,349 with a total cost value of $171 million, from the contractor list to determine if they were in the District s possession and if they were tagged properly by tracing each asset recorded to their location in the District. We also compared them to the IT list. l We randomly selected 20 fixed assets from 249 purchased, with a total value of $424,261, during fiscal year valued at $17,500 and traced to their locations to determine if their service tag agreed with the invoice and if the District tag agreed with the IT list. We conducted this performance audit in accordance with GAGAS (generally accepted government auditing standards). Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objective. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objective. Unless otherwise indicated in this report, samples for testing were selected based on professional judgment, as it was not the intent to project the results onto the entire population. Where applicable, information is presented concerning the value and/or size of the relevant population and the sample selected for examination. 6 Office of the New York State Comptroller

9 A written corrective action plan (CAP) that addresses the findings and recommendations in this report must be prepared and provided to our office within 90 days, pursuant to Section 35 of General Municipal Law, Section (3) (c) of New York State Education Law and Section of the Regulations of the Commissioner of Education. To the extent practicable, implementation of the CAP must begin by the end of the fiscal year. For more information on preparing and filing your CAP, please refer to our brochure, Responding to an OSC Audit Report, which you received with the draft audit report. We encourage the Board to make the CAP available for public review in the Clerk s office. Office of the New York State Comptroller 7

10 Appendix C: Resources and Services Regional Office Directory Cost-Saving Ideas Resources, advice and assistance on cost-saving ideas Fiscal Stress Monitoring Resources for local government officials experiencing fiscal problems Local Government Management Guides Series of publications that include technical information and suggested practices for local government management Planning and Budgeting Guides Resources for developing multiyear financial, capital, strategic and other plans Protecting Sensitive Data and Other Local Government Assets A nontechnical cybersecurity guide for local government leaders Required Reporting Information and resources for reports and forms that are filed with the Office of the State Comptroller Research Reports/Publications Reports on major policy issues facing local governments and State policy-makers Training Resources for local government officials on in-person and online training opportunities on a wide range of topics 8 Office of the New York State Comptroller

11 Contact Office of the New York State Comptroller Division of Local Government and School Accountability 110 State Street, 12th Floor, Albany, New York Tel: (518) Fax: (518) Local Government and School Accountability Help Line: (866) NEWBURGH REGIONAL OFFICE Tenneh Blamah, Chief Examiner 33 Airport Center Drive, Suite 103 New Windsor, New York Tel: (845) Fax: (845) Serving: Columbia, Dutchess, Greene, Orange, Putnam, Rockland, Ulster, Westchester counties Like us on Facebook at facebook.com/nyscomptroller Follow us on